A TECHNICAL VIEW ON CNX--BANK NIFTY FOR—10.12.2021

 

CNX--BANK NIFTY

Open—37331.75---High—37397.55--Low—36884.45---Close—37082.45 on 9.12.2021.

Support:36876.35/36844/36655.40/36647/36525.95/16151.95/35977.97/35810.90/35531.35/35359.25/35327.90/34817.50/34115/33908/33273.95. 

Resistance: -37140/37232.20/37708.75/37891/38112.75/38377.25/38426/38932.45/39117.15/39292.80/40011.15/40160.20/41367.25/41829.60.

(Bold and underlined figures are most important). 

It opened on a positive note but could not go up much higher and traded in the negative territory throughout the day and finally after two days of decent rise closed with a loss of 202.25 points.  It is into medium term correction mode now. Its immediate critical points are at 37232---36909---36894—36862.30(figure may change). It closed below 37232 today therefore it has slipped into very short term correction now within the medium term correction mode, however as long as it holds the range of 36909---36894---36862.30 chances of pullback up move will be there and if it moves above 37982 and sustain then it may gain good up momentum, but if it breaks below 36894 then the long term  uptrend will be in jeopardy again and break below 36862.30 may end the pullback rally hope and it may resume down move again, which may please be noted. Moving up from here it will face stiff resistance from its critical points at 37232---37477---37591---37871---38140---38400---38652---40416---40723---41040 (figures may change) and to regain the steady up momentum again it has to move above this range and sustain, chances of crossing this range and sustain above it looks tremendously weak as of now. Similarly moving down its important support points will be at 36909---36894---36862.30---36844---36647---36525---36497---36327---36151---35696.75---35359.25---35327.90 (figure may change).

It is still into medium term correction mode, but above its short term moving averages on the daily chart, which is a positive sign but it is still below it on the weekly chart. It is still below almost all of its medium term moving averages on the daily chart, therefore it has to be seen whether it sustain above its short term moving averages and move above its medium term moving averages or not in next 1-2 trading session. Furthermore it is way below some of its long term parameters which are in the range of 38140---41040(figure will change every day) therefore it is still not out of woods and the ongoing  up move is just a good pullback rally and you are well aware that these rallies can fizzle out abruptly. But please note that few important technical indicators which were weak on the daily and weekly chart for some time, but some indicators are giving positive indication on the daily chart now, therefore if it holds the key levels as mentioned above for the next few days then chances are that it may pick up good and steady up momentum in coming days/weeks, else it may resume down move again. The short term trend has improved a bit but has to be seen how it pans out in next few days, because it is still in corrective mode. The long term uptrend is intact as of now. It is suggested to be alert in long trade below 36894 (figure may change) and avoid long trade below 36850(figure may change) for sure.    

It is important to mention here that pullback rallies are treacherous in nature and can end abruptly, it is therefore suggested that one should be extremely alert and cautious in the long trade initiated for pullback gains.

In view of the above, it is still into medium term correction mode now, but since it closed above its pullback threshold point of 36862.50 and long term uptrend upholding point of 36894(figure will change every day) therefore long trade can be tried if it holds the range of 36894---36862.30 on decline or if it moves above 37285 and maintain for some time for pullback gains. I strongly caution here that long trade in a corrective mode for pullback gains could be a risky affair; therefore one should be extremely cautious and vigilant in the long trade at this point of time.  It is still in corrective mode; therefore short trade can be attempted on the rise at appropriate point or can be tried on the price breakdown for taking advantage of the down move gains.

NOTE: - If it opens up with huge gap up then wait for it to settle down before initiating long position, but short trade can be attempted on huge gap up if it is near the selling point and vice versa . Since, it is showing volatility so any type of trade should be squared off during the day, if you don’t have reasonable profit margin in the trade. Day squaring off is strongly suggested in any case.

TRADING STRATEGY (Suggested)

1. Buy on decline in the range of 36894---36862.30 but not below it with a stop loss of 36750. It is for both the traders.

Or

Buy if it moves above 37285 and maintain for some time with a stop loss of 37060. It is for both the traders.

2. Sell on the rise near or within the range of 37400---37470 with a stop loss of 37570. It could be a risky trade but worth trying for intraday gain.

 

Or

Sell if it moves below 36840 with a stop loss of 36930. It could be a risky trade but worth trying for intraday gains.

Disclaimer:-The view expressed here are solely of the author and he is not at all responsible in any way for the outcome of the trade you enter based on the above view.

Kindly note that make your cost your stop loss in favorable  trade and then trail it as the price move up/down to gain maximum profit and avoid losses. Use support and resistance levels as entry, exit, target and trailing stop loss points. DO NOT TRADE WITHOUT STOP LOSS.

 Note: Price stated here are of spot market.

Contact me for strategic guidance to enter and exit trade.

Thanks 

Narendra Kumar Surana

suranank@gmail.com

Mobile—8240951127/9831313654.